Filing summary
Entity mismatch: The provided filing is for Collier Creek Holdings, a blank-check company, not Utz Brands, Inc. It is a Form 10-Q for the quarter ended September 30, 2018, signed November 16, 2018. The financial statements cover the three months ended September 30 and the period from inception on April 30, 2018 through September 30, 2018.
Business context and reporting period
Collier Creek had not commenced operating activities by September 30. It was formed to pursue a business combination, with an intended focus on consumer goods and related sectors. Accordingly, this filing reports formation and offering-preparation activity, not Utz’s operating results or snack-food business.
Financial results and liquidity
- Revenue: None reported; the company stated it would not generate operating revenue until a business combination closes.
- Net loss: $10 for the third quarter and $6,781 from inception through September 30, entirely general and administrative expense. Basic and diluted loss per share was reported as $0.00 loss, rounded.
- Cash and liquidity at September 30: $40,503 cash; working-capital deficit of approximately $622,000. Current liabilities were $662,891, including $155,000 due under a related-party note and $505,494 of accrued expenses.
- Total assets were $681,110, primarily $640,607 in deferred offering costs. Shareholders’ equity was $18,219. No operating cash flow was reported as a source of liquidity; net cash used in operating activities was $11 from inception.
- Debt: The $155,000 sponsor note was non-interest-bearing and unsecured; it was fully repaid October 17, 2018. No revenue, operating margin, or meaningful debt-performance comparison is applicable to this pre-operating SPAC.
Material changes and subsequent financing
- No comparable prior-year operating period is presented; the company was incorporated April 30, 2018.
- After quarter-end, the IPO closed October 10: 44 million units at $10 each, for $440 million gross proceeds. Each unit included one Class A share and one-third of a warrant. The sponsor separately purchased 7.2 million private-placement warrants for $10.8 million gross proceeds.
- The filing states that $440 million was placed in the trust account upon closing; elsewhere it reports $431.2 million in trust, including the deferred underwriting discount. The filing also reports approximately $2.03 million outside the trust. These disclosed cash figures warrant reconciliation.
- IPO costs were approximately $25.04 million, including $15.45 million in deferred legal fees and underwriting commissions. The $15.4 million deferred underwriting commission is payable only if a business combination is completed.
- The sponsor surrendered 500,000 founder shares on October 19 after the underwriters partially exercised the over-allotment option.
Outlook, terms, and risks
- The company had 24 months from the IPO closing to complete a business combination; otherwise, it must cease operations, redeem public shares, and wind up, subject to creditor claims and applicable law.
- A target generally must have fair market value of at least 80% of trust net assets at agreement signing, and the company must acquire control. Public shareholders may redeem shares in connection with a business combination; redemptions are generally limited to 15% for an individual shareholder or group absent company consent.
- Founder shares are subject to conversion and potential dilution provisions; founder holders agreed to vote in favor of a deal and waive redemption rights on founder shares. Public warrants may expire worthless if no deal closes.
- Forward-purchase agreements provide for up to $35 million of additional shares and warrants at a business-combination closing. The sponsor also agreed to protect the trust against certain third-party claims, subject to stated exceptions.
- Management reported effective disclosure controls and no material change in internal control during the quarter. No legal proceedings or material changes to prospectus risk factors were reported. Management said short-term trust investments were not expected to create material interest-rate exposure.
Important facts for investors to verify
- Confirm the issuer: this filing is Collier Creek Holdings, not Utz Brands, Inc.
- Reconcile the trust-account amounts disclosed as $440 million and $431.2 million, and the reported $2.03 million outside the trust.
- Review the IPO prospectus and subsequent filings for business-combination progress, redemption terms, sponsor arrangements, and potential dilution from founder shares, warrants, and forward purchases.
- Confirm that the sponsor note was repaid and understand the deferred underwriting commission and other deal-contingent costs.